Well guys, I just put mine up in the air per request. Transfer case in neutral (manual shift.. no neutral position on automatics), transmission in neutral just to be sure. Spin one wheel by hand and the other spins.... in the SAME direction. Very tightly bound together, as well.. no lag. Spin one, the other spun in the same direction immediately.

Not sure what Jay has if his is spinning opposite directions. Maybe a broken or worn out LSD?

Now the thing I found interesting is this: The neutral position on the manual transfer case is between 4H and 4L (typical). When I spun the rear wheel, the rear drive shaft spun, which I expected, but the front drive shaft spun also. That means the front and rear output of the transfer case are tied together when in neutral, but disconnected from the transmission. This must be why it's recommended to remove the rear drive shaft if you tow it for long distances.